Will funding be harder to come by in adtech? Maybe.
According to new data from Crunchbase, global startup funding fell to $17 billion in August — the lowest monthly total since 2017. That’s a 44% drop from July and a 12% decline year over year. All levels of funding showed softness, across both earlier- and later-stage rounds.
The slowdown follows a hot first half of 2025, when AI companies in particular drove a surge in overall capital raised.
Why This Matters:
For adtech, the retreat is concerning. The sector doesn’t operate in a silo — it’s competing for investor attention with industries like pure-play AI, deep tech, and even healthcare (these VCs have varied portfolios!). As investors become more selective, adtech companies will likely face tougher competition for capital as dollars flow to perceived “safer bets.”
Consider Scope3, which had some early momentum but has just announced layoffs. While they point to a shift in strategy, ultimately, capital might be harder to come by.
Experts React:
Here’s the key quote from Gené Teare, Senior Data Editor at Crunchbase News:
“Since 2023, we’ve seen a noticeable summer pullback in either July or August, when global venture funding typically dips below $20 billion.
It’s typical for late-stage funding to lag in these slower months. Less typically, there was also a significant pullback at the seed stage last month, when funding at that phase nearly halved compared to July and fell a third from a year ago.
Late-stage funding declined more than 50% compared to July and fell by a fifth year over year, Crunchbase data shows.
Early-stage funding also declined month over month, but to a lesser degree, and increased slightly from a year ago. Relative to past months, Series B rounds held up by both counts and amounts.”
The question now: will the late-summer slump spill over into fall? The broader macroeconomic environment is also facing challenges that could impact everything from funding to hiring.
Our Take:
There is a silver lining. For adtech, the August downturn may accelerate M&A. If raising new capital becomes more difficult, founders and investors will increasingly look to exits. Well-capitalized players may seize opportunities to acquire promising companies at lower valuations, while struggling startups may see acquisition as the only viable option.
OK, so let’s make a prediction: expect consolidation to play a larger role in shaping adtech in the final months of 2025 as tighter capital markets shift focus from big funding rounds to deals. (It’s your time, Terry!)
